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Plan  of  Reorganization 


of  the 


Oregon  Improvement  Company. 


John  I.  Waterbury,  N.  Y.,  ] 

T.  Jefferson  Coolidge,  Jr.,  | 

Boston,  !  n  ... 

E.  Kollins  Morse,  Boston,  \  ®ommi  ee- 
Edwin  S.  Hooley,  New  York,  j 
Jules  S.  Bache,  New  York,  J 

Simpson,  Thacher  &  Barnum. 

Counsel, 

10  Wall  Street, 

New  York. 


New  York, 
Boston, 


£  May  29, 1896. 


Present  Situation. 


The  Improvement  Company  has  outstanding  : 


1.  First  mortgage  bonds,  six  per  cent. _ _  $4,071,000 

2.  Consolidated  mortgage  bonds,  five  per  cent.__  6,214,000 

3.  Preferred  stock _ _ _ _ _  310,000 

4.  Common  stock _  7,000,000 


As  well  as  other  obligations  and  liabilities  which  must  be 
paid,  adjusted,  settled  or  provided  for. 

It  is  also  necessary  to  make  provision  for  extensive  re¬ 
pairs  upon  the  Company’s  steamships,  and  improvements  to 
and  extension  of  its  railroads,  and  for  the  purchase  of  new 
steamships  and  other  property  which  will  be  necessary  to 
enable  the  Company  to  carry  on  its  business  profitably. 


2 


Plan  of  Reorganization. 

I. 

A  Company,  with  the  requisite  corporate  powers  and 
franchises,  which  may  be  an  existing  Company  or  one 
created  for  the  purpose,  and  which  for  convenience  is  here¬ 
inafter  called  the  “  new  Company,”  is  to  be  invested  with 
the  title  to  the  steamships,  railroads,  stocks,  bonds  and 
other  property,  and,  so  far  as  possible,  with  the  franchises 
of  the  present  Oregon  Improvement  Company,  and  create 
and  as  required  issue  the  following  securities,  to  wit  : 

1.  Its  fifty-year  gold  bonds  for  the  principal  sum  of  $1,000 
each,  bearing  interest  at  the  rate  of  five  per  centum  per 
annum,  payable  semi-annually  on  the  first  days  of  June  and 
December  in  each  year,  and  secured  to  be  paid  by  a  mort¬ 
gage  or  deed  of  trust,  which  upon  the  satisfaction  of  existing 
liens  shall  be  a  first  lien  upon  all  the  new  Company’s  prop¬ 
erty,  rights  and  franchises,  and  which  shall  contain  such 
provisions  for  the  protection  and  security  of  the  holders  of 
said  bonds  as  counsel  shall  advise. 

The  said  bonds  shall  be  limited  in  principal  to  $5,000,000 

2.  Four  per  cent,  non-cumulative  preferred 

stock _ 5,000,000 

3.  Common  stock _  $9,000,000 

The  new  shares  will  be  of  the  par  value  of  one  hundred 

dollars  each. 

The  preferred  stock  shall  have  a  preference  as  to  dividends 
to  the  amount  of  four  per  cent,  per  annum,  which  shall  not 

be  cumulative  ;  that  is  to  say,  the  preferred  stock  in  any 

year  shall  be  paid  four  per  cent,  in  dividends  before  any 
dividend  is  paid  upon  the  common  stock.  After  the  pay¬ 
ment  of  four  per  cent,  upon  the  preferred  stock  in  any  year, 
the  common  stock  shall  next  be  entitled  to  four  per  cent,  in 


dividends ;  and  if,  in  any  year,  dividends  in  excess  of  four 
per  cent,  upon  the  preferred  and  four  per  cent,  upon  the 
common  stock  be  paid,  both  classes  of  stock  shall  share 
ratably  therein,  each  share  of  stock  receiving  the  same  part 
thereof  as  any  other  share,  without  regard  to  whether  it  be 
preferred  or  common. 


II. 

The  holders  of  bonds  or  stock  of  the  present  Company, 
or  of  receipts  or  certificates  representing  bonds  or  stock 
which  have  been  deposited  with  the  Committee  under  the 
preliminary  agreement  dated  October  8,  1895,  who  are  or 
who  shall  become  parties  to  the  reorganization  and  perform 
the  conditions  thereof,  will  be  entitled  to  receive  bonds  or 
stock  of  the  new  Company  upon  the  following  basis  and 
conditions,  to  wit  : 

1.  As  to  First  Mortgage  Bonds. 

Holders  of  first  mortgage  bonds  will  be  entitled  to  receive 
for  each  bond  deposited  hereunder  not  later  than  July  1, 
1896,  with  all  unpaid  coupons  attached,  the  interest  due  on 
such  bonds  June  1,  1896,  to  wit,  thirty  dollars  ($30)  per 
bond,  in  cash,  payable  at  the  time  of  depositing  said  bonds, 
and  one  hundred  and  ten  per  cent.  (110%)  of  the  principal 
of  such  bonds  in  new  five  per  cent,  bonds,  bearing  interest 
from  June  1,1896,  deliverable  when  the  reorganization  shall 
have  been  completed. 

Holders  of  certificates  representing  first  mortgage  bonds 
deposited  under  the  preliminary  agreement  of  October  8, 
1895,  wTho,  on  or  before  July  1,  1896,  exchange  the  same  for 
reorganization  receipts  or  certificates  issued  hereunder,  will 
be  entitled,  on  making  such  exchange,  to  receive  in  cash  the 
interest  due  on  such  bonds  June  1,  1896,  to  wit,  thirty 
dollars  ($30)  per  bond. 

LIBRARY 

UNIVERSITY 

I  103662 


OF 


4 


The  remainder  of  the  new  five  per  cent,  first  mortgage 
bonds  will  be  reserved  to  be  issued  by  the  new  Company 
only  for  the  purpose  of  acquiring  new  steamships  or  other 
property  required  by  the  new  Company,  the  mortgage  secur¬ 
ing  the  same  to  provide  that  such  bonds  shall  not  be  issued 
at  a  greater  rate  than  at  the  rate  of  $100,000  par  value  of 
bonds  per  annum,  and  then  only  upon  the  purchase  or  acqui¬ 
sition  of  property  of  a  value  equal  to  the  par  value  of  said 
bonds,  which  property  shall  become  subject  to  said  mortgage 
or  otherwise  be  added  to  the  security  for  said  bonds. 

2.  As  to  Consolidated  Mortgage  Bonds  : 

Holders  of  consolidated  mortgage  bonds  deposited  here¬ 
under  on  or  before  July  1,  1896,  will  be  entitled  to  purchase 
an  amount  of  new  preferred  stock  equal  to  twelve  and  one- 
half  per  cent.  (12£%)  of  the  principal  of  their  holdings  of 
such  consolidated  bonds,  i.  e.,  one  hundred  and  twenty-five 
dollars  ($125)  per  bond,  at  the  price  of  par  or  $100  per  share, 
payable  in  instalments,  each  of  not  exceeding  twenty-five 
dollars  ($25)  per  bond  so  deposited,  on  the  call  of  the  Com¬ 
mittee  at  intervals  of  not  less  than  thirty  days  and  on  not 
less  than  ten  days  notice  by  publication  in  each  case. 

Holders  of  consolidated  mortgage  bonds  so  deposited 
hereunder  who  so  purchase  and  pay  for  new  preferred  stock 
will  be  entitled  to  receive  in  exchange  for  their  present  hold¬ 
ings  fifty  per  cent.  (50%)  of  the  principal  thereof  in  new 
preferred  stock  and  seventy-five  per  cent.  (75%)  of  such 
principal  in  new  common  stock. 

In  other  words,  each  holder  of  consolidated  mortgage 
bonds  deposited  hereunder,  who  contributes  one  hundred 
and  twenty-five  dollars  ($125)  in  respect  of  each  bond  so 
deposited  will  be  entitled  to  receive  for  each  such  bond  six 
hundred  and  twenty-five  dollars  ($625)  in  new  preferred 
stock  and  seven  hundred  and  fifty  dollars  ($750)  in  new 
common  stock. 


5 


Holders  of  receipts  or  certificates  representing  consoli¬ 
dated  mortgage  bonds  deposited  under  the  preliminary 
agreement  of  October  8,  1895,  should  exchange  the  same  for 
reoganization  receipts  or  certificates  issued  hereunder  on  or 
before  July  1,  1896. 

3.  As  to  preferred  stock  : 

Holders  of  preferred  stock  deposited  hereunder  on  or  be¬ 
fore  July  1,  1896,  will  be  entitled  to  purchase  an  amount  of 
new  preferred  stock  equal  to  twelve  and  one-half  per  cent. 
(12-J  per  cent.)  of  the  par  of  their  holdings  of  old  preferred 
stock  so  deposited,  at  the  price  of  par  or  $100  per  share,  pay¬ 
able  in  instalments  of  not  exceeding  two  and  one-half 
dollars  ($2.50)  per  deposited  share  each,  on  the  call  of  the 
Committee  at  intervals  of  not  less  than  thirty  days  and  on 
not  less  than  ten  days’  notice  by  publication  in  each  case. 

Holders  of  old  preferred  stock  so  deposited  hereunder,  who 
so  purchase  and  pay  for  new  preferred  stock,  will  be  en¬ 
titled  to  receive  in  exchange  for  their  present  holdings  fifty 
per  cent.  (50%)  of  the  par  thereof  in  new  preferred  stock, 
and  seventy-five  per  cent.  (75%)  of  the  par  thereof  in  new 
common  stock. 

In  other  words,  each  holder  of  preferred  stock  deposited 
hereunder  who  contributes  twelve  and  one- half  dollars 
($12.50)  in  respect  of  each  share  so  deposited,  will  be  en¬ 
titled  to  receive  for  each  such  share  sixty-two  and  one-half 
dollars  ($62.50)  in  new  preferred  stock  and  seventy-five 
dollars  ($75)  in  new  common  stock. 

Holders  of  receipts  or  certificates  representing  old  pre¬ 
ferred  stock  deposited  under  the  preliminary  agreement  of 
October  8,  1895,  should  exchange  the  same  for  reorganiza¬ 
tion  receipts  or  certificates  issued  hereunder  on  or  before 
July  1,  1896. 


6 


4.  As  to  Common  Stock. 

Holders  of  common  stock,  deposited  hereunder  on  or 
before  July  1,  1896,  will  be  entitled  to  purchase  an  amount 
of  new  preferred  stock  equal  to  ten  per  cent.  (10%)  of  the 
par  of  their  holdings  of  such  old  common  stock  at  the  price  of 
par  or  $100  per  share,  payable  in  instalments  of  not  ex¬ 
ceeding  two  and  one-half  dollars  ($2.50)  per  deposited 
share  each,  on  the  call  of  the  Committee  at  intervals  of  not 
less  than  thirty  days  and  on  not  less  than  ten  days’  notice 
by  publication  in  each  case. 

Holders  of  common  stock  deposited  hereunder  who  so 
purchase  and  pay  for  new  preferred  stock  will  be  entitled  to 
receive  in  exchange  for  their  present  holdings  fifty  per  cent. 
(50%)  of  the  par  thereof  in  new  common  stock. 

In  other  words,  each  holder  of  common  stock  deposited 
hereunder  who  contributes  ten  dollars  ($10)  in  respect  of 
each  share  so  deposited  will  be  entitled  to  receive  for  each 
such  share  ten  dollars  ($10)  in  new  preferred  stock  and 
fifty  dollars  ($50)  in  new  common  stock. 

Holders  of  receipts  or  certificates  representing  common 
stock  deposited  under  the  preliminary  agreement  of  October 
8, 1895,  should  exchange  the  same  for  reorganization  re¬ 
ceipts  or  certificates  issued  hereunder  on  or  before  July  1, 
1896. 

5.  The  other  obligations  and  liabilities  and  debts  of  and 
claims  against  the  Improvement  Company  are  to  be  paid, 
purchased,  settled,  compromised  or  left  undisturbed,  as  the 
Committee  may  in  their  discretion  deem  advisable. 

6.  The  Committee  is  to  have  full  power  to  readjust  the 
terms  of  leases  and  other  contracts  held  by  the  Improve¬ 
ment  Company,  and  deal  with  the  same  and  the  properties 
operated  thereunder,  and  the  securities  representing  the  same 
as  the  best  interests  of  the  parties  hereto  seem  to  them  to 
demand. 


7 


III. 

Distribution  of  New  Securities. 

The  foregoing  plan,  if  carried  into  effect,  will  result  in  the 
following  distribution  of  securities,  to  wit  : 

1.  New  five  per  cent,  first  mortgage  bonds _ $5,000,000 

(a)  Offered  to  present  firsts _  4,478,100 

(b)  Reserved  to  be  issued  by  the  new 
Company  for  new  steamships  or 
other  property  required  by  it  at  no 
greater  rate  than  $100,000  of  bonds 

par  value  per  annum _  521,900 

2.  Preferred  stock  four  per  cent,  non-cumu- 

lative _ $5,000,000 

(a)  Offered  to  holders  of  con¬ 
solidated  mortgage  bonds 

for  cash _  $776,750 

And  on  payment  thereof  in 
exchange  for  present  hold¬ 
ings  _ 3,107,000 

- $3,883,750 

(b )  Offered  to  holders  of  pre¬ 
ferred  stock  for  cash _  38,750 

And  on  their  payment 
thereof  in  exchange  for 

present  holdings _  $155,000 

- $193,750 

(c)  Offered  to  holders  of  common  stock 

for  cash _ $700,000 

3.  Common  stock _ $9,000,000 

(a)  Offered  to  holders  of  consolidated 
bonds  on  paying  for  new  preferred 

stock  as  aforesaid _  4,660,500 

(b)  Offered  to  holders  of  preferred 
stock  on  paying  for  new  preferred 

stock  as  aforesaid _  $232,500 


8 


( c )  Offered  to  holders  of  common  stock 
on  their  paying  for  new  preferred 
stock  as  aforesaid _ $3,500,000 

There  will  be  available  for  the  purposes  of  the  re¬ 

organization  : 

Cash _ $1,515,500 

New  preferred  stock _  222,500 

New  common  stock _  607,000 

By  the  agreement  of  reorganization,  to  which  security 
holders  become  parties  by  depositing  their  securities  as- 
herein  provided,  the  Committee  is  given  full  power  and  dis¬ 
cretion  to  determine  and  arrange  the  details  of  the  reorgani¬ 
zation  and  in  carrying  the  same  into  effect,  and  is  authorized, 
for  any  purpose  or  purposes  of  the  reorganization,  or  for  the 
benefit  of  the  Company  or  its  property  as  they  in  their  discre¬ 
tion  may  see  fit,  to  use  and  dispose  of  the  cash  contributed  by 
the  holders  of  bonds  or  stock,  and  the  new  stock,  preferred 
or  common,  not  required  for  exchange  for  or  to  retire  out¬ 
standing  bonds  or  stock  or  not  taken  or  used  for  such  pur¬ 
poses. 

IY. 

Subject  to  extension  by  the  Committee,  the  holders  of 
first  mortgage  bonds,  of  consolidated  mortgage  bonds,  of 
preferred  stock  and  of  common  stock,  must  deposit  the  same 
with  the  Manhattan  Trust  Company,  10  Wall  street,  New 
York  City,  or  the  Old  Colony  Trust  Company,  Ames  Build¬ 
ing,  Boston,  Mass.,  on  or  before  July  1,  1896,  receiving 
therefor  negotiable  reorganization  receipts  or  certificates  of 
deposit. 

Subject  to  extension  by  the  Committee,  holders  of  cer¬ 
tificates  representing  first  mortgage  bonds,  consolidated 
mortgage  bonds,  preferred  stock  or  common  stock  depos¬ 
ited  under  the  preliminary  agreement  dated  October  8, 


9 


1895,  must  exchange  such  certificates  for  regular  negotiable 
reorganization  receipts  or  certificates  of  deposit  issued  here¬ 
under  at  the  office  of  the  Manhattan  Trust  Company,  10 
Wall  Street,  New  York  City,  or  at  the  office  of  the  Old 
Colony  Trust  Company,  Ames  Building,  Boston,  Mass.,  on 
or  before  July  1,  1896. 

The  cash  to  be  contributed  by  the  holders  of  consolidated 
mortgage  bonds  is  payable  to  one  of  said  Trust  Companies 
in  instalments  of  not  exceeding  twenty-five  dollars  ($25) 
per  bond  each,  on  the  call  of  the  Committee  at  intervals 
of  not  less  than  thirty  days  and  on  not  less  than  ten  days’ 
notice  by  publication  in  each  case. 

The  cash  to  be  contributed  by  the  holders  of  preferred 
stock  is  payable  to  one  of  said  Trust  companies  in  instal¬ 
ments  of  not  exceeding  two  and  one-half  dollars  ($2.50)  per 
share  each,  on  the  call  of  the  Committee  at  intervals  of  not 
less  than  thirty  days  and  on  not  less  than  ten  days’  notice 
in  each  case. 

The  cash  to  be  contributed  by  the  holders  of  the  common 
stock  is  payable  to  one  of  said  Trust  Companies  in  instal¬ 
ments  of  not  exceeding  two  and  one-half  dollars  ($2.50) 
per  share  each,  on  the  call  of  the  Committee  at  intervals  of 
not  less  than  thirty  days  and  on  not  less  than  ten  days’ 
notice  in  each  case. 

The  depositing  security  holders  who  pay  their  respective 
-contributions  as  herein  provided  will  be  entitled  to  receive 
new  securities  on  the  completion  of  the  reorganization  and 
the  surrender  of  their  respective  reorganization  certificates. 

The  Trust  companies,  depositaries  hereunder,  will  issue 
for  securities  deposited  their  engraved  negotiable  reorgani¬ 
sation  receipts  or  certificates,  which,  as  soon  as  practicable, 
will  be  listed  upon  the  Stock  Exchanges  of  New  York  and 
Boston. 


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